Friendly countries to help bridge current account deficit: Asad

ISLAMABAD: Minister for Finance Asad Umar Wednesday said the financial assistance pledged by the friendly countries was sufficient to bridge the current account deficit for present fiscal year.

Briefing the Senate’s Standing Committee on Finance, Revenue, and Economic Affairs about the country’s current economic status, the minister said due to the measures taken by the present government on war footing basis, the current account gap had almost been plugged.

“During the year 2017-18, the current account deficit reached record level of $19 billion and it had become inevitable to adjust the rupee value to bridge the financial gap, besides making financial agreements with the friendly countries,” he added.

The meeting was held here with Senator Farooq H. Naik in the chair.

Asad Umar said Saudi Arabia had already released $2 billion out of agreed $3 billion in cash, while 98 per cent work regarding purchase of oil for one year on deferred payment had been completed.

There would be a good news regarding similar arrangements with the United Arab Emirates (UAE) as talks in that regard were underway, he added.

He said matters with respect to financial and trade agreements with China had also been finalized.

Speaking about negotiations with the International Monetary Fund (IMF), the minister said soon after taking charge of his office, he had approached the IMF for talks. An IMF team remained in the country from September 27 till October 04 and held detailed parleys regarding various government departments.

He said all except one economist of the country had termed the government’s decision to avail a new IMF programme right. The IMF’s conditions were in fact the ones which the present government itself wanted to implement. The IMF had asked to control electricity and gas thefts as the country was suffering losses of around Rs 600 billion and Rs 150 billion respectively on their counts, he added.

He said negotiations with the IMF were still continuing. A video conference with the IMF authorities was scheduled later today.

Committee chairman Farooq H Naik expressed his reservations over declining foreign direct investment in the country. The government should take steps to increase exports in order to reduce the trade deficit, he added.

Asad Umar said during 2009-2017, the country’s economic performance was worse and it would take some time to improve it. “We are taking measures to make Pakistan a business friendly country, besides reducing electricity and gas prices for the textile and other industrial sectors.”

State Bank of Pakistan (SBP) Governor Tariq Bajwa informed the committee that the government was informed about the adjustment of rupee value, but its volatility on the particular day was due to market reaction, which was controlled within two hours as transactions of only $2 million were made during that period.

Senator Sherry Rehman stressed the need to improve the system, saying sudden devaluation of rupee in a single day had a bad impact on the country’s overall business.